The Dell Inspiron 15z is one of Dell's latest PC offerings.
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In October 2011, I managed to annoy Michael Dell.

It was shortly after Steve Jobs died, and I sat with Dell for a 30-minute talk at the company's home in Round Rock, Texas. I was a reporter for Dow Jones at the time.

The interview had nearly ended, and Dell was on his way out the door when I asked the question, "Michael, is there anything you learned from Steve Jobs and his time at Apple that you can apply to Dell?"

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He paused thoughtfully and then said that he'd met Jobs while in college and that it left a big impression on him. I responded that that was great, but what about now? Was Dell trying to emulate Apple in any way or had he gained any insights from Apple's transformation?

Dell clearly didn't like the inquiry. He stopped for a moment, scowled, and then said, "I think we're done here," as he walked out of the room.

I'm still waiting for the answer to my query, and maybe now Dell can find it as a private company, unencumbered by the needs of public investors and the scrutiny of Wall Street.

Clearly, the tables have turned for Dell, and that's why I asked that question. During the dot-com boom, Dell was on top of the PC market, and Apple was still struggling to come back from its near-death moment. Michael Dell famously quipped in late 1997 that all that could be done for then-struggling Apple was to "shut it down and give the money back to shareholders."

It's easy to pass off Dell's predicament as an entertaining case of schadenfreude, but the company isn't a giant on the brink the way Apple was in the mid-1990s. While Dell's fiscal third-quarter net income tumbled 47 percent from the same quarter a year ago to $475 million and its revenue dropped 11 percent to $13.7 billion, it still generated $1.3 billion in cash flow from operations during the period ended Nov. 2. That brought its total cash and investments to $14.2 billion.

Michael Dell at the Web 2.0 Summit in October 2011.
James Martin/CNET
In short, the glass is half full. Dell remains one of the world's biggest PC makers, though its market share has been falling to Asian rivals such as Lenovo. It's trying to emulate IBM by expanding in business technology like storage and services, but the operations haven't been showing results fast enough for investors.

And in high-growth markets like smartphones and tablets, Dell's efforts could charitably be described as disappointing, pointing toward an alarming future of shrinking sales in low-growth or no-growth markets.

So how do you get this once-mighty but still huge company back on track? Dell ultimately decided the best way to do it was behind a curtain. Michael Dell and investment firm Silver Lake said todaythat they're partnering on a $24.4 billion leveraged buyout, and Microsoft is even kicking in a $2 billion loan to help fund the deal.

While going private may unsettle customers right now, it's the right thing to do. The company can do what it needs to without disclosing every move to regulators and public shareholders. For example, it can grow its enterprise business and figure out what it's going to do in mobile.

"I would describe Dell's last few years as in transition but lacking focus," Forrester analyst David Johnson said. "[As a private company], they could be more nimble and able to focus the organization and business faster."

(Note the Forrester analyst is not the David Johnson who previously oversaw Dell's M&A strategy.)

Dell played a key role in the PC revolution, but its traditional products are being left behind in the mobile boom. For Dell, that has meant shifting focus to providing data center technology instead of simply selling PCs. And it has had some success there. While overall fiscal third-quarter results were dismal, revenue in Dell's server and networking business climbed 11 percent from the previous year to $2.32 billion.

But building an enterprise business and attracting new customers to replace consumers takes time. Dell has been expanding its offerings by making acquisitions, such as IT services provider Perot Systems and storage maker Compellent. But pulling all that together into one neat package -- a la IBM Global Services -- takes time.

And going private buys time. Dell apparently will stay the course with its current plans to diversify away from PCs, based on comments Chief Financial Officer Brian Gladden made to several publications today.

In addition, Dell's closer relationship with Microsoft through the software giant's loan could end up being mutually beneficial. Microsoft has been trying to more tightly control the entire device-making process. It not only builds its own tablets now but also has started exerting more say over its partners' products. An even closer relationship between Microsoft and Dell could result in devices with better integration between hardware and software in consumer devices. And it also could ensure Microsoft has a strong partner for its enterprise business.

Of course, there are risks with going private. Instead of quarterly check-ins with investors, Silver Lake could grow frustrated and demand faster improvements. And just because Dell doesn't have to answer to public shareholders doesn't mean its backers won't expect returns on their investments.

In addition, customers may be hesitant to buy many Dell products because they're afraid -- rightly or wrongly -- that Dell won't continue to support what they bought.

"While the company might come out of this transition stronger with a product lineup that better meets the needs of businesses and public sector organizations, there will be uncertainty as to what products and services stay, get [strengthened], or get eliminated," Carter Lusher, chief IT analyst at Ovum, said.

And even if Dell has more time and less scrutiny, the overall tech environment remains very competitive. IBM sure won't be waiting for Dell to figure out its strategy, and neither will HP, Lenovo, Apple, or various other rivals.

More than anything, Dell needs to start innovating, whether it's in PCs, mobile devices, or enterprise offerings. If there's anything Michael Dell should have learned from Jobs and Apple, it's this: It's not enough to simply build me-too products.

About the author

Shara Tibken is a senior writer for CNET focused on Samsung and Apple. She previously wrote for Dow Jones Newswires and the Wall Street Journal. She's a native Midwesterner who still prefers "pop" over "soda."
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